MackTheKnife's Blog : SPX and a Confluence of Interest

Howdy Mack,

I tend to agree that the market is irrational. This is a very good rally, one of the best I have ever witness if not the best. Unbelievable.

Regarding 3 and 4. I glean that you take that as a negative event. Generally a close above the upper bollinger is followed by consolidation or reversal. Even so, it is not uncommon to see consecutive closes above the upper bollinger bands. My charts do conflict with yours in that regard as well. Using the (20,2) I am getting the upper bollinger at 1029 as of the close. An image of that chart is below.

We have had two consecutive closes above the prior up-trend support. This is very uncommon when a market is turning over. While this could be an important turning point, it is probably wise to let the trend fail before entering short positions. Like you, I have lightened up but there is a good chance there is a day or two left in this rally.

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Howdy, TB!

I tend to agree that the market is irrational.

Actually, I believe Mr. Market has been not irrational but rational since Mar 6 of this year. However, the little manic-depressive appears to be at a critical juncture at the moment. Therefore, I think the action in the SPX this week will foreshadow two very different futures, one pretty positive and one pretty negative. The former would entail a bit of either consolidation or correction, while the latter would entail a move through the congestion on the way to Cloud Cuckoo Land.

This is a very good rally, one of the best I have ever witness if not the best. Unbelievable.

I agree: This move has been quite nice.

Regarding 3 and 4. I glean that you take that as a negative event.

As one who prefers rationality to irrationality -- at all times and in all places -- I take that as a positive event.

Generally a close above the upper bollinger is followed by consolidation or reversal. Even so, it is not uncommon to see consecutive closes above the upper bollinger bands.

Very true.

My charts do conflict with yours in that regard as well. Using the (20,2) I am getting the upper bollinger at 1029 as of the close. An image of that chart is below.

Mine is a weekly chart; yours is a daily chart.

I have lightened up but there is a good chance there is a day or two left in this rally.

If Mr. Market were to choose to head for Cloud Cuckoo Land now, I suspect there is a good chance there may be many days left in this rally.

The horror, the horror.

Good luck!

MackTheKnife

I have lightened up but there is a good chance there is a day or two left in this rally.

If Mr. Market were to choose to head for Cloud Cuckoo Land now, I suspect there is a good chance there may be many days left in this rally.

For me, more, perhaps many more days to this rally is likely. Too many people want the market to let them in, and too many others want it to let them out. So I do not believe this is the top. Even so, how we go higher is as important as going higher. It will be interesting how rattled the market gets from its present juncture of certified, justified, and unquestionably rational reasons to go down.